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Anyone an accountant? Question on my taxes about roomate...

L

LiQiCE

Golden Member
I know ATOT is not the end all place to answer all of your questions, even though it sometimes seems like it 🙂 ... But I was hoping somebody who might be in the tax accounting business, or even has done this before could help me out.

I bought a house in June of 2001, and I'm living in it as my main residence. However, I also have a roomate who lives with me, shares the entire living space with me ... Like you would share an apartment with a friend. He pays me rent, and 1/2 utilities. The rent goes directly into the mortgage, and the utilities go directly toward the utilities.

Now, I'm trying to do my taxes with H&R Block's TaxCut software and they only give me the choice for a residence that I rent out completely, or a residence where I rent out X number of rooms or rent out a percentage of my house. Since we share all living space, I don't really have a percentage I can put down. I heard from friends who do this that they don't claim anything since you share living space they said that you don't have to claim any income. Does anyone know if this is true? How would I claim it if I'm supposed to? I don't want to have to pay more than I should, but I don't want to not claim it and get in trouble too..

Thanks for any help that can be provided!!!!
 
I think you'd look at this like claiming a portion of your house as a home office. You can't count the space unless it's dedicated 100% to your roommate. So the percentage would be the square footage of the room that he uses exclusively.
 
Originally posted by: BooneRebel
I think you'd look at this like claiming a portion of your house as a home office. You can't count the space unless it's dedicated 100% to your roommate. So the percentage would be the square footage of the room that he uses exclusively.
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So that would be the 10' x 10' little room that he has 🙂 ... Which is practically nothing. But he's paying rent for use of the entire house ... So what do I do, pay taxes on the percentage of the house that is exclusively his? Thats like $5.00 for the year 🙂

 
Technically, you should declare the rent paid to you as taxable income and then deduct the percentage of the home used by your roommate as an expense.

Me, I'm a CPA. Computing the expense amount would be a pain in the arse. I'd just forget about it. What the IRS doesn't know won't hurt you 🙂
 
I had a roommate that was living in a house with me and I always claimed the full amount of mortgage interest and real estate taxes on my tax return. He paid a monthly rent but I paid all the utilities (actually he had his own phone line that he was billed for separately). We shared most of the living spaces, though his bedroom was all his (though technically to get to the water heater I had to go through the closet in his room).

Technically I probably should not have been taking the full deduction, but it's not like the rent he was paying me was allowing me to live an extravagant lifestyle above my means that would have caused a red flag at the IRS.
 
Just pray he doesn't claim the rent on his taxes. It's not a federal thing, and I don't know how many states allow this, but in Michigan I could claim a property tax credit on any rent paid. The state assumes some of your rent is going toward the property owner's tax bill.
 
Originally posted by: bunker
Just pray he doesn't claim the rent on his taxes. It's not a federal thing, and I don't know how many states allow this, but in Michigan I could claim a property tax credit on any rent paid. The state assumes some of your rent is going toward the property owner's tax bill.
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There is nothing on the Federal or the Virginia state tax forms which asks how much you paid in rent, so I don't think this would be a problem for me.
 
Originally posted by: JoeBaD
Technically, you should declare the rent paid to you as taxable income and then deduct the percentage of the home used by your roommate as an expense.

Me, I'm a CPA. Computing the expense amount would be a pain in the arse. I'd just forget about it. What the IRS doesn't know won't hurt you 🙂
Click to expand...

 
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